Demand for palm oil from China and India to increase

Demand for palm oil from the world’s top buyers China and India is expected to pick up in the near future as prices for the vegetable oil are currently reasonable compared to those of its rivals, Reuters reported, citing a statement from the Malaysian Palm Oil Board (MPOB). The statement said palm oil prices of 3,900 ringgit ($889) per tonne were currently considered “optimum” and were expected to remain at that level, helped by a recovery in soybean oil prices. Last year, crude palm oil was more expensive than crude soybean oil due to tight supplies and logistical problems caused by floods, as well as an increase in Indonesia’s biodiesel blending mandate to 40%. However, vegetable oil supplies have since improved and production is expected to increase in the coming months. This has put pressure on the Malaysian palm oil contract, causing prices to fall 12% this year. Analysts expect the crude palm oil (CPO) price to return to a fair spread with its main competitor this month. ...